3 Ways Advisors Can Help Clients Plan for Extended Care

The American Health Care Association and the National Center for Assisted Living are currently reporting a nationwide shortage of nurses staffing assisted living facilities. While trends like this are startling, they also expose a blind-spot in our understanding of long-term care.

Most caregiving is actually done at home by family rather than in facilities by professionals.

In fact, a 2022 survey from Thrivent found that more than one in five adult Americans — 21% — are providing some level of support to an elderly family member.

As professional care becomes increasingly expensive and harder to find, more and more families will be compelled to provide care to their loved ones themselves, causing that percentage to only rise over time.

When we focus on these growing challenges, we can clearly see why the need for extended care planning is more important than ever.

As we strive to help clients develop extended care plans for themselves and their families, here are three vital suggestions to keep in mind.

1. Lead proactive conversations, which are far better than reactive ones.

As the saying goes, the best time to plant a tree is 20 years ago, the second best time is today.

By starting the planning conversation as soon as possible, you'll be better equipped to offer more options and deliver better outcomes to your clients.

Thrivent's survey also found that over 60% of Americans do not have an extended care plan in place for themselves or their family.

It also revealed that 70% of Americans believe having an extended care plan for family members before they need care is very important to them.

The conclusion we can draw from this is that clients very much understand the importance of having a plan for addressing any potential extended care needs but are having difficulty creating those plans.

This is why one of the single most important things we can do as financial advisors is to have proactive conversations with them about their potential need for care and the challenges associated with that care.

Understanding the realities of caregiving is a vital part of having an effective conversation about extended care with your clients.

At Thrivent, we offer our members access to a benefit called Dari by Homethrive, which provides them with online resources and personalized advice about extended care.

Some of the questions our members have frequently asked Homethrive's experts include "Is Mom safe living at home? How do I assess this?" or "My loved one is being discharged from a hospital stay/rehab — now what do I do?" These reveal the underlying difficulties that commonly come with caregiving.

Having answers to these types of questions before discussing extended care with a client can go a long way in helping them create a plan.

While these conversations can be difficult, it's essential to have them early — and often.

If you're having a conversation with a client after an extended care event has already occurred, chances are it's already too late for them to maximize their options to fully cope with the situation.

2. Keep in mind that every extended care plan is personal.

There is no one-size-fits-all to an extended care plan.

Every client has their own specific goals and priorities that need to be considered when crafting a plan that will work for them.

Understanding how a client intends to receive care can make a big difference in how their plan is built.

This begins with understanding the specific options for receiving care.

Because many family members are not professional caregivers, trying to understand and navigate the complex systems that surround extended care is particularly challenging.

For example, Homethrive saw a 47% increase in inquiries from Thrivent members for support due to struggles in understanding health insurance plans and coverage, and saw a 50% increase in inquiries for assistance with purchasing costly and complex durable medical equipment.

This means clients can benefit from more education around care options and the financial (and non-financial) resources they need to support their preferred method of care.

For example, a client may feel that receiving care at home would be too much of a burden on their family and prefer to receive it in a professional facility.

For this client, it would make sense to explore funding options that would provide them leeway in selecting a facility that can meet that goal.

But another client may feel strongly that they want to receive their care at home.

For this individual, they'll need to figure out how they can ensure their family has the support they need to provide that care consistently — potentially over several years.

3. Since extended care planning is vital to your clients' long-term financial well-being, make it a priority.

A final takeaway from the 2022 Thrivent survey is the finding that 87% of adults said they would experience a significant strain to their finances from an extended care event, with 43% indicating that they have no financial means to sustain care.

For financial advisors, this reinforces the scope of this challenge, as funding extended care can affect many other aspects of a client's overall financial wellbeing.

An unplanned extended care event can complicate even the most detailed financial strategies.

With funding being diverted to pay for care, it can be difficult for clients to achieve other goals, like retirement, or even maintain the standard of living that they have become used to.

Because of this, it's necessary for us to explore how funding, or not funding care, has implications for all the other financial goals a client may have.

The bright side is that there are many options available to clients that let them personalize their path based on their goals and resources.

Whether it's earmarking funds for extended care for those that are able to self-fund, a product such as traditional and hybrid long-term care insurance that provides protection as well as other associated benefits, or even partnership policies for those who want to maintain their Medicaid eligibility, there is a funding solution that can be applied to any situation, no matter how unique.

Ultimately, as the challenge of extended care grows, we too have an opportunity to rise to the occasion.

By being proactive in having conversations and educating our clients, we can help them — and their families — create extended care plans that help them achieve greater financial clarity and confidence about the future.

Steve Sperka is vice president of solutions design and implementation at Thrivent.